Keppel Pacific Oak US Reit posts 8.8% fall in distributable income to US$23.8 million for H2

THE manager of Keppel Pacific Oak US Reit (Kore) on Tuesday (Feb 4) posted an 8.8 per cent fall in distributable income to US$23.8 million for H2 ended Dec 31, from US$26.1 million in the previous corresponding period.

This brought its income available for distribution for the full-year down 8.8 per cent to US$47.6 million from US$52.2 million. 

The office-focused US real estate investment trust (Reit) did not declare distributions for the period. In February 2024, the Reit announced that it would suspend distributions for the next two years from H2 FY2023 to H2 FY2025. 

Its revenue for H2 slipped 3.7 per cent to US$72.1 million from US$74.8 million in the previous corresponding period, and its net property income (NPI) declined 14.1 per cent to US$36.3 million from US$42.2 million.

For the full year, revenue was down 2.9 per cent year on year at US$146.4 million from US$150.8 million and its NPI was 9.1 per cent lower at US$78.3 million from US$86.1 million. 

The decline in revenue for H2 FY2024 came as rental income was lower on the year. This was primarily due to the reduction in non-cash amortisation of straight-line rent and lease incentives, as well as higher free rent resulting from timing differences in leases completed for the respective periods, the Reit’s manager said. 

Additionally, the Reit experienced higher vacancies from The Plaza Buildings and Iron Point. It also received higher one-off termination fees in H2 FY2023. 

Its lower NPI for H2 as compared with the year-ago period was driven by higher property expenses for H2 FY2024, which rose 9.7 per cent to US$35.8 million from US$32.6 million million due to increased costs related to repairs and maintenance, property management fees, and other property-related expenses, the manager said.  

Units of Kore closed unchanged on Monday at US$0.24.